Alabama housing costs at a glance
| Alabama | |
|---|---|
| Median home value (Zillow) | $241,000 |
| Average effective property tax | 0.37% |
| Typical rate for a new buyer (calculator default) | 0.45% |
| Average homeowners insurance ($300k dwelling) | $3,408 a year |
| 2026 conforming loan limit (one unit) | $832,750 |
Example: median-priced home
Alabama home for $241,000, 20% down, 6.5% 30-year fixed: principal and interest $1,219 + property tax $90 + insurance $284 = about $1,593 a month. Enter your own rate quote and the actual tax rate of the property for a precise figure.
Alabama property tax
Alabama has the lowest property taxes in the US along with Hawaii: about 0.37% of home value on average. Homes are assessed at 10% of their value, and the homestead exemption reduces the state and county tax further; owners aged 65 and over can be exempt from the state portion.
Other Alabama costs
- Deed tax: $1 per $1,000 of the price; mortgage tax: $1.50 per $1,000 of the loan (0.15%).
- Insurance: about $3,400 a year on average, and much more near the Gulf Coast because of hurricanes; Alabama's FORTIFIED home program gives discounts for stronger roofs.
- See also the Alabama paycheck calculator.
Other states
See also the Alabama paycheck calculator and mortgage costs in other states.
Frequently asked questions
What is the property tax rate in Alabama?
About 0.37% of home value on average, one of the two lowest in the US.
What is the monthly payment on a median-priced Alabama home?
On a $241,000 home with 20% down at 6.5%, principal and interest are about $1,219; with property tax at 0.45% and average insurance the total is about $1,593 a month.
What closing taxes are there in Alabama?
A deed tax of $1 per $1,000 of the price and a mortgage tax of $1.50 per $1,000 of the loan.
Why is home insurance expensive in Alabama?
Hurricane, tornado and storm risk; coastal homes pay far more than the $3,400 state average.
For information only; not a loan offer. Property tax, insurance and closing costs depend on the specific property and lender.
Sources
- Alabama Department of Revenue – property tax
- FHFA – 2026 conforming loan limits
- U.S. Census Bureau ACS 2024 – real estate taxes (via NAHB / Construction Coverage)
- Zillow Home Value Index
- Insurify – home insurance by state
Rules checked: October 2026